Evolving Innovation Provisions
in FY26 NDAA
Lawmakers Appear Ready to Pass Major Acquisition Reform for Military's Innovation Enterprise
By: Ida Bagus Made Widyadnya, Hanah Bloom, Elijah Weaver, Mathew Montiel
During 2025, two key pieces of defense acquisition reform legislation – the FoRGED (Fostering Reform and Government Efficiency in Defense) and SPEED (Streamlining Procurement for Effective Execution and Delivery) acts – made their way into Senate and House versions of the National Defense Authorization Act. Each bill contains numerous provisions that could have major consequences for the way that DoD does business. ETI reviewed each bill for provisions that are of particular relevance to emerging technologies in defense. Our high-level summary of each provision, with some interpretation of its potential ramifications, is presented below. Note that some, or all, of these provisions could change or be entirely removed from the final NDAA.
2026 Senate NDAA
SEC. 211 – “MODIFICATIONS TO DEFENSE RESEARCH CAPACITY BUILDING PROGRAM”
Beginning in fiscal year 2026, the DoD must issue separate solicitations under its research capacity-building program for Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and other Minority-Serving Institutions (MSIs). This is likely an attempt to boost funding for HBCUs, TCUs, and MSIs by providing dedicated solicitations for institutions with varying levels of research capacity. Tailoring opportunities allows the DoD to strategically support emerging research programs at underrepresented institutions and foster innovation across a broader academic base.
SEC. 212 – “PROGRAM FOR THE ENHANCEMENT OF THE RESEARCH, DEVELOPMENT, TEST, AND EVALUATION CENTERS OF THE DEPARTMENT OF DEFENSE”
Codifies and expands a prior authority (originally from the FY2017 NDAA) allowing defense labs and test centers to waive certain policies or regulations, with approval from senior leadership, to improve their efficiency and effectiveness. Encourages innovation and agility within defense laboratories, enabling them to experiment with new business practices or partnerships that accelerate technology development for the warfighter.
SEC. 219 – “ADVANCED ROBOTIC AUTOMATION FOR MUNITIONS MANUFACTURING”
Directs the Army to launch a program to mature and expand the use of robotics and automation in ammunition manufacturing, particularly at government-owned, contractor-operated (GOCO) munitions plants. It also requires a briefing to Congress on the effort by March 1, 2026.
SEC. 220 – “DUAL-USE AND DEFENSE ADVANCED MANUFACTURING INNOVATION HUBS”
Mandates that DoD establishes one or more advanced manufacturing hubs to drive dual-use innovation. These hubs would be designed to serve as regional centers bringing together government, industry, and academia to develop and scale new manufacturing techniques. By tying this provision to dual-use applications, this provision aims to spur industrial modernization that benefits national security and the broader economy.
SEC. 220A – “ADVANCED MANUFACTURING AND ADDITIVE MANUFACTURING PROGRAMS”
This provision encourages DoD to qualify and approve at least one million additively manufactured parts, subject to funding. It also specifically calls for using additive manufacturing for unmanned aerial systems, ground vehicles, parts facing obsolescence, and other metal components. If additively manufactured components were available at this scale, it could shorten supply chains and lead times, allow on-demand production of spares, increasing readiness and reducing costs.
SEC. 220B – “IMPROVEMENTS RELATING TO ADVANCED MANUFACTURING”
Elevates advanced manufacturing as a priority in defense acquisition governance. It amends 10 U.S.C. §4842 to make the Under Secretary of Defense for Acquisition & Sustainment a co-chair of key manufacturing industrial base groups and requires updates to guidance and manuals on advanced manufacturing. This provision could strengthen oversight and clarify policy for incorporating innovations such as digital design, automated production, and 3D printing into procurement programs.
SEC. 220C – “LIMITATION ON AVAILABILITY OF FUNDS FOR FUNDAMENTAL RESEARCH COLLABORATION WITH CERTAIN ACADEMIC INSTITUTIONS”
Restricts DOD’s FY2026 funding from being expended for grants or contracts at universities which are not in compliance with DOD’s restrictions and compliance requirements against hostile foreign participation in sensitive US research.
SEC. 223 – “EVALUATION OF ADDITIONAL TEST CORRIDORS FOR HYPERSONIC AND LONG-RANGE WEAPONS”
This provision requires DOD to provide Congress with an evaluation of potential options for expanding or creating additional test corridors for testing hypersonic weapons, including potential FAA and DOD designated locations.
SEC. 232 – “DEPARTMENT OF DEFENSE BIOTECHNOLOGY STRATEGY”
Requires DoD to develop a comprehensive strategy for investing in and leveraging biotechnology across the Department, coordinating efforts in areas like bioengineering, bio-manufacturing, and biosecurity. The strategy would be delivered to Congress by June 1, 2026. The impetus is the finding that the U.S. risks falling behind nations like China in biotech research and defense applications.
SEC. 328 – “INTEGRATION OF COMMERCIALLY AVAILABLE ARTIFICIAL INTELLIGENCE CAPABILITIES INTO LOGISTICS OPERATIONS”
Directs DoD to integrate off-the-shelf AI tools for logistics tracking, planning, and analytics into at least two military exercises in FY2026. This provision could lead DoD to demonstrate commercial AI in real-world exercises, identify lessons learned, and build confidence for broader deployment.
SEC. 842 – “SMALL UNMANNED AIRCRAFT SYSTEM INDUSTRIAL BASE REMEDIATION PLAN”
Requires the Pentagon’s acquisition and industrial base leaders to develop a roadmap by March 1, 2026, for achieving a robust U.S. industrial base for small unmanned aerial systems (sUAS). It also calls for an independent assessment of U.S. capacity to produce drone components and finished systems, with a report due in 2026.
SEC. 849A – “MODIFICATIONS TO DEFENSE INDUSTRIAL BASE FUND”
Expands the allowable uses and authorities of the Industrial Base Fund by amending 10 U.S.C. §4817. This gives DoD greater flexibility to invest in industrial base projects and partner with private capital, for example by extending loans and loan guarantees, or potentially even purchasing company equity. In combination with the unprecedented $8.3B expansion of the Industrial Base Fund via the 2025 One Big Beautiful Bill Act, these authorities could greatly expand the Industrial Base Fund’s role in US industrial policy.
SEC. 869 – “ENHANCEMENT OF DEFENSE SUPPLY CHAIN RESILIENCE AND SECONDARY SOURCE QUALIFICATION”
Establishes “Expedited Qualification Panels” in each service to approve new sources for certain system components within 14 days. This provision aims to speed up the approval of alternate suppliers of spare parts.
SEC. 1018 – “PILOT PROGRAM ON USE OF AUTOMATED SHIPBUILDING TECHNOLOGIES AND CAPABILITIES”
Directs the Navy to run a 5-year pilot program to identify and demonstrate novel automated ship hull construction techniques on at least one ship program. If successful, this pilot will inform broader modernization of U.S. shipyards, helping deliver ships faster and addressing workforce constraints. This provision also requires the Navy to report annually on the pilot’s progress.
SEC. 1518 – “PILOT PROGRAM FOR UNMANNED AERIAL VEHICLE RESUPPLY TO LAUNCH CONTROL FACILITIES”
Authorizes a 3-year Air Force pilot program to test using unmanned aerial vehicles to deliver supplies to remote intercontinental ballistic missile launch control centers. This provision could improve the safety and logistic support for nuclear forces (for example, in bad weather or high-threat scenarios) and demonstrate a model of unmanned resupply that could extend to other austere or contested environments.
SEC. 1531 – “MATTERS RELATING TO THE GOLDEN DOME MISSILE DEFENSE SYSTEM”
Revises the U.S. national missile defense policy and requires annual briefings to Congress on the development and deployment of the Golden Dome system until it achieves full capability. It also formally establishes a Golden Dome for America program manager role and directs the Missile Defense Agency to contract for two new missile range test vessels.
SEC. 1544 – “IMPROVING UNITED STATES MISSILE DEFENSE CAPABILITIES”
Calls for funding assessments on how to speed up various missile defense programs and technologies and requires combatant commanders to explicitly include their needs for sensors and counter-UAS defenses in the annual budget process. Notably, it also urges that testing and initial fielding of the Next-Generation Interceptor (the planned successor to current homeland defense interceptors) be completed by January 1, 2028, if appropriations allow.
SEC. 1602 – “UNITED STATES CYBER COMMAND ARTIFICIAL INTELLIGENCE INDUSTRY COLLABORATION ROADMAP”
This provision encourages DoD to advance AI-driven cyber tools to hold adversaries at risk in the rapidly evolving cyber domain. It directs the Commander of U.S. Cyber Command (CYBERCOM) to develop a roadmap for collaboration with industry and academia on AI-enabled cyber capabilities outlining key elements, such as joint development efforts, industry engagement strategies, contracting mechanisms, clearance requirements, and organizational options by August 1, 2026. It further requires CYBERCOM to brief Congress on the chosen course of action by November 1, 2026, and to provide annual updates through 2030.
SEC. 1621 – “PUBLIC-PRIVATE CYBERSECURITY PARTNERSHIP FOR HIGHLY CAPABLE ARTIFICIAL INTELLIGENCE SYSTEMS”
Requires the DoD to establish a public-private partnership focused on securing advanced artificial intelligence and machine learning systems. Under the direction of the Assistant Secretary of Defense for Cyber Policy, a partnership body must be established within 180 days to bring together DoD and industry experts to address cybersecurity and physical security threats to “highly capable” AI/ML systems. This provision aims to align US public and private responses against sophisticated state actors toward critical AI systems.
SEC. 1628 – “GUIDANCE AND PROHIBITION ON USE OF CERTAIN ARTIFICIAL INTELLIGENCE”
Prohibits the DoD from using specific high-risk artificial intelligence software associated with foreign adversaries. It directs the Secretary of Defense to “exclude or remove” any covered AI, explicitly including AI developed by the Chinese company DeepSeek or entities backed by “High Flyer”, from DoD systems and devices within 30 days of enactment. Additionally, it bans DoD contractors from employing such covered AI in any work for the Department after the same 30-day window.
SEC. 6083 – “PROHIBITION ON PRIORITIZING COUNTRIES OF CONCERN OVER UNITED STATES PERSONS FOR EXPORTS OF ADVANCED INTEGRATED CIRCUITS”
Creates additional export controls for high performance semiconductors, and creates a new process for enforcing “right of first refusal” for potential American buyers of semiconductors, before chips can be sold to US-designated countries of concern.
SEC. 6611 – “STRATEGY ON QUANTUM READINESS”
Instructs DoD to create a strategy for quantum readiness focused on the opportunities and risks for the department relating to quantum computing, with an emphasis on cryptography.
2026 House of Representatives NDAA
SEC. 155 – “REPORT ON NEXT GENERATION FUEL CELLS”
Requires the Department of Defense to report by March 15, 2026, on next-generation fuel cell technologies. This could indicate that DoD will assess advanced fuel cell applications, perhaps for portable power, vehicles, or installations, and provide details on their feasibility, benefits, and integration plans.
SEC. 208 – “FUNDING FOR ADVANCED DRONE DEVELOPMENT FOR SPECIAL OPERATIONS AND LOW-INTENSITY CONFLICT”
Increases authorized funding for near term R&D and prototyping for advanced drones for U.S. Special Operations Command. Fast-tracks innovative drones or autonomous systems that can support special operations, such as surveillance UAVs, loitering munitions, or resupply drones.
SEC. 209 – “FUNDING FOR QUANTUM COMMUNICATIONS CORRIDOR FOR NAVY RESEARCH, DEVELOPMENT, TEST, AND EVALUATION”
Authorizes funding to create a “quantum communications corridor” as part of Navy research, development, test, and evaluation. Supports developing a testbed or network to advance quantum communication research so that the Navy (and DoD) can securely transmit information resistant to quantum computer decryption in the future. This capability could be vital for command and control, as well as generally advancing research collaboration among major hubs of quantum computer infrastructure.
SEC. 214 – “EXTENSION OF LIMITATION ON AVAILABILITY OF FUNDS FOR FUNDAMENTAL RESEARCH COLLABORATION WITH CERTAIN ACADEMIC INSTITUTIONS”
Extends through FY2026 an existing prohibition (enacted in FY2025 NDAA) on using DOD funds for research if any researcher involved has current or pending support from a foreign entity of concern. Signals ongoing vigilance in safeguarding U.S. R&D from intellectual property theft or espionage.
SEC. 216 – “SUPPORT FOR RESEARCH AND DEVELOPMENT OF BIOINDUSTRIAL MANUFACTURING PROCESSES”
Adds to an initiative (originally started in the FY2023 NDAA) to advance bioindustrial manufacturing, using biological processes to produce materials, fuels, or chemicals at scale. Amends prior authority to expand DoD support for R&D in this field.
SEC. 218 – “POST-EMPLOYMENT RESTRICTIONS FOR PARTICIPANTS IN CERTAIN DEFENSE RESEARCH”
Establishes a three-year post-employment ban for principal investigators and certain key participants of DoD-funded “covered defense research” projects, preventing them from accepting employment or compensation from any foreign entity of concern during that period. Aims to protect critical technologies and research findings from being transferred abroad for a few years after project completion.
SEC. 219 – “NATIONAL SECURITY AND DEFENSE ARTIFICIAL INTELLIGENCE INSTITUTE”
Authorizes the establishment of a National Security and Defense AI Institute envisioned as a center of excellence to promote AI education, research, and workforce development tailored to defense applications. Such an Institute could train military and civilian personnel in AI, test and evaluate AI tools for DoD, and interface with industry on AI innovations, resulting in a more AI-ready workforce and faster adoption of AI across defense programs.
SEC. 222 – “BIOTECHNOLOGY SUPPLY CHAIN RESILIENCY PROGRAM”
Authorizes the Secretary of Defense to establish a program focused on transitioning biotech research from the lab into applications that support the defense supply chain. Could bolster supply chain resilience using biotechnology (e.g. producing enzymes, specialty chemicals, etc. via bio-manufacturing or using biotech for waste recycling in logistics).
SEC. 232 – “RESEARCH, DEVELOPMENT, AND IMPLEMENTATION OF UNATTENDED ROBOTIC PROCESS AUTOMATION”
Robotic Process Automation (RPA) uses software and AI to streamline repetitive workflows. This provision requires the Department to establish a framework and policies to deploy RPA technologies securely. A DoD task force will oversee integration and effectiveness of RPA implementation, and the Secretary must report to Congress within 180 days on progress, including performance metrics, cost-effectiveness, and potential risks of expanding unattended automation.
SEC. 311 – “INCLUSION OF NUCLEAR ENERGY AND NUCLEAR TECHNOLOGIES IN ELIGIBLE INVESTMENTS MADE BY OFFICE OF STRATEGIC CAPITAL”
Expands the mandate of the DoD’s Office of Strategic Capital (OSC) to support the nuclear sector. It amends OSC’s authorization to include add “nuclear energy” and “nuclear technologies” to the list of technology areas in which the OSC can make eligible investments.
SEC. 321 – “STUDY ON SMALL MODULAR NUCLEAR REACTORS”
Requires DoD to study the feasibility of deploying Small Modular Reactors (SMRs) to power military installations. Within one year, DoD must assess benefits for energy resilience and readiness, identify suitable sites, address safety and regulatory issues, and review ongoing pilots with DOE and industry.
SEC. 869 – “PROHIBITION ON THE PURCHASE OF PHOTOVOLTAIC MODULES FROM FOREIGN ENTITIES OF CONCERN”
Prohibits DoD from procuring solar photovoltaic modules or photovoltaic cells that are manufactured by any “foreign entity of concern,” with the potential for waivers. This could support efforts to onshore clean energy manufacturing, aligning energy security with national security.
SEC. 870D – “PROHIBITION ON PROCUREMENT OF CERTAIN ORGANIC LIGHT EMITTING DIODE DISPLAY TECHNOLOGIES”
Amends 10 U.S.C. §4667, banning DoD, effective June 30, 2027, from entering into or renewing any contract for OLED display technologies that are fabricated in a foreign adversary country or by a foreign adversary entity, or for products that include such OLED components. This could affect the supply chain of advanced display technologies, used in everything from aircraft cockpit screens to VR goggles.
SEC. 875 – “ORGANIC SMALL UNMANNED AIRCRAFT SYSTEM MANUFACTURING CAPACITY”
Launches a pilot to build domestic manufacturing for small UAS within DoD. Directs the Secretary of Defense to form a “Sky Foundry” Working Group to recommend rapid development, testing, and production models, identify potential production facilities, and propose policy changes. A report to Congress is due in 270 days with recommendations and actions to expand U.S. drone production.
SEC. 882 – “PERMANENT EXTENSION OF PHASE FLEXIBILITY AND INCLUSION OF SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM”
Makes permanent DOD’s “Direct to Phase II” authority within the Small Business Innovation Research (SBIR) program and extends that same flexibility to the Small Business Technology Transfer (STTR) program. Pioneered by the Air Force's AFWERX SBIR program, Direct to Phase II process proved to be especially popular among commercial companies with products that were able to proceed to Phase II without needing Phase I funding.
SEC. 883 – “AUTHORITY TO MAKE ADDITIONAL SEQUENTIAL PHASE II AWARDS UNDER THE SMALL BUSINESS INNOVATION RESEARCH PROGRAM OR SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM”
Expands and clarifies DOD’s authority to issue sequential Phase II awards to SBIR or STTR recipients. Rather than a project being limited to one Phase II award for a given project, this language would allow DoD to follow an initial Phase II with one additional Phase II award for further development of technology.
SEC. 891 – “SPECIAL OPERATIONS COMMAND URGENT INNOVATIVE TECHNOLOGIES AND CAPABILITIES PILOT PROGRAM”
Creates a five-year pilot program within U.S. Special Operations Command to rapidly prototype and field innovative technologies. The “USSOCOM Urgent Innovative Technologies and Capabilities Pilot Program” grants the Commander expedited acquisition authorities to accelerate R&D, testing, and initial sustainment outside standard processes.
SEC. 902 – “MODIFICATION TO AUTHORITIES OF THE UNDER SECRETARY OF DEFENSE FOR RESEARCH AND ENGINEERING”
Expands the statutory authorities of the Under Secretary of Defense for Research and Engineering (USD(R&E)) to coordinate R&D across military departments and conduct activities such as developmental prototyping in the field in to support the rapid transition of technologies.
SEC. 905 – “FURTHER MODIFICATIONS TO CAPITAL ASSISTANCE PROGRAM OF THE OFFICE OF STRATEGIC CAPITAL”
Augments the DOD Office of Strategic Capital’s toolkit by granting it equity investment authority, allowing OSC to take equity stakes in private companies, rather than solely acting as a creditor/lender. These authorities are especially notable given OSC’s very large $200B lending authority.
SEC. 912 – “JOINT COUNTER-SMALL UNMANNED AIRCRAFT SYSTEMS OFFICE”
Formally establishes a Joint Counter-small Unmanned Aircraft Systems Office (JCO) in law, solidifying it as a Joint DoD activity responsible for leading, coordinating, integrating, and advocating all efforts to defeat small unmanned aircraft systems (sUAS).
SEC. 913 – “AUTHORITY TO ESTABLISH REGIONAL OUTREACH CENTERS FOR THE DEFENSE INNOVATION UNIT”
Authorizes the Defense Innovation Unit (DIU) to establish regional outreach centers, including in U.S. technology hubs and internationally to scout dual-use technology and engage non-traditional vendors. The section also requires DIU’s Director to brief Congress on plans to establish at least two additional regional hubs in FY2026 (and to consider overseas locations).
SEC. 917 – “DETERMINATION OF LEAD ORGANIZATION RESPONSIBLE FOR APPROVAL AND VALIDATION OF CERTAIN UNMANNED AIRCRAFT SYSTEMS AND COMPONENTS”
Directs the DoD to conduct a review of DoD entities that could assume primary responsibility for approving and “blue listing” trusted sUAS and related components under the “Blue UAS” program. Requires an analysis of the resources dedicated to the program and a determination on whether to permanently assign it to another DoD entity or to provide DIU with the personnel and funding necessary to continue as the lead.
SEC. 1070M – “RESPONSIBLE USE OF ARTIFICIAL INTELLIGENCE FOR LOGISTICS, INTELLIGENCE, MAINTENANCE, CYBER DEFENSE, AND OTHER MISSION AREAS”
Urges the Pentagon to expand testing and fielding of AI-enabled systems to improve decision-making, cut costs, and boost warfighter effectiveness. Pushes DoD to be proactive and “responsible” in leveraging AI technology, scaling up successful pilot programs and addressing challenges (like trust, ethics, or interoperability). Requires the Secretary of Defense to report every six months on AI integration in areas like logistics, maintenance, intelligence, and cyber defense, including barriers and recommendations.
SEC. 1205 – “RESEARCH, DEVELOPMENT, TEST, AND EVALUATION OF EMERGING TECHNOLOGIES TO FURTHER THE WARFIGHTING CAPABILITIES OF THE UNITED STATES AND CERTAIN PARTNER COUNTRIES”
Authorizes joint R&D programs between the U.S. and specific allied nations to develop emerging defense technologies that enhance both parties’ military capabilities in cutting-edge fields like artificial intelligence, cybersecurity, robotics, quantum computing, and automation. Paves the way for faster innovation with close allies, by pooling talent and resources on high-tech military solutions that both the U.S. and its partners can use, while also strengthening safeguards around those collaborations.
SEC. 1216 – “ESTABLISHMENT OF DEFENSE INNOVATION UNIT OFFICE IN ISRAEL”
Requires the DoD to establish a DIU office in Israel within 180 days of enactment. This DIU office would engage with Israel’s Ministry of Defense and private technology sector to identify cutting-edge Israeli innovations and facilitate their integration into the U.S. defense industrial base.
SEC. 1531 – “ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING SECURITY IN THE DEPARTMENT OF DEFENSE”
Mandates that within 180 days, the Secretary of Defense issue a department-wide policy for AI/ML cybersecurity, covering threats like adversarial attacks, data poisoning, and supply chain risks. Requires lifecycle security measures, testing standards, personnel training, and a review of DoD’s current posture with a report due by August 31, 2026. Extends “software bill of materials” requirements to AI for greater transparency and supply chain security.
SEC. 1606 – “USE OF MIDDLE TIER ACQUISITION PROGRAM FOR PROLIFERATED WARFIGHTER SPACE ARCHITECTURE OF SPACE DEVELOPMENT AGENCY”
Expands the Space Development Agency’s authority to use Middle Tier Acquisition for Tranches 4–6 of its Proliferated Warfighter Space Architecture. This allows accelerated development and fielding of low-earth satellite constellations through rapid prototyping and streamlined oversight, and provides clearer demand signals to commercial space companies than would otherwise be feasible.
SEC. 1642 – “GOLDEN DOME FOR AMERICA”
Calls for a comprehensive plan to develop and deploy a next-generation homeland air and missile defense system, “Golden Dome for America.” Within 180 days, DoD must submit a detailed architecture plan, assess threats, outline timelines, roles, and integration needs, and secure the supply chain. Requires annual updates through FY2030 and a separate report on theater missile defense posture within one year.
SEC. 1736-1740 – THE ‘‘SECURING AMERICAN FUNDING AND EXPERTISE FROM ADVERSARIAL RESEARCH EXPLOITATION ACT OF 2025’’
Prohibits DoD from funding U.S. institutions or researchers that collaborate with entities classified as “hostile foreign entities,” or who have done so within the preceding five years, with the possibility for waivers. The provision would also create new compliance and disclosure requirements for researchers and universities. According to many analysts, this provision would likely require any researchers or research institutions that wish to receive DoD research funding to terminate most research collaboration (e.g. co-authorships, study abroad collaborations) with students and professors in hostile countries such as China.
SEC. 1835 – “TRANSITION TO ADVANCED MANUFACTURING FOR CERTAIN CRITICAL ITEMS”
Requires that the Program Executive Officer (PEO) for each major weapon system identify critical components that could be produced using advanced manufacturing techniques (such as additive manufacturing/3D printing) and develop a transition plan. Each PEO is required to submit a plan to the Under Secretary of Defense for Acquisition & Sustainment detailing how and to what extent those critical systems will be moved to advanced manufacturing processes.
SEC. 1843 – “QUALIFICATION, ACCEPTANCE, AND SUPPLY CHAIN MANAGEMENT OF PRODUCTS MANUFACTURED USING ADVANCED MANUFACTURING”
Directs DoD to form a Defense Industrial Resilience Consortium to review policies for qualifying advanced manufacturing items and managing their supply chains. The group would review standards, recommend new certification and risk management procedures for 3D-printed components, and propose workforce training.
