Fact Sheet: President Donald J. Trump Prioritizes the Warfighter in Defense Contracting

Whitehouse.gov ^ | January 7, 2026 | The Whitehouse

[SoConPubbie]

PUTTING OUR WARFIGHTERS FIRST: Today, President Donald J. Trump signed an Executive Order to stop defense contractors from putting stock buybacks and excessive corporate distributions ahead of production capacity, innovation, and on-time delivery for America’s military.

• The Order directs the Secretary of War to identify defense contractors that underperform, fail to invest their own capital in production capacity, insufficiently prioritize U.S. government contracts, or maintain inadequate production speed while spending money that could be spent on those critical needs on stock buybacks or corporate distributions.

• Identified contractors have the opportunity to submit a remediation plan or otherwise engage with the Secretary of War to resolve the issues; if the Secretary of War determines the plan is inadequate or the dispute remains unresolved after mutual discussions, the Secretary is authorized to immediately pursue remedies including mutually agreeing to amend the underlying contract, exercising authorities under the Defense Production Act, or pursuing other available contract enforcement mechanisms.

• The Order directs the Secretary of War to take steps to ensure that future contracts prohibit stock buybacks and corporate distributions during periods of underperformance, non-compliance, insufficient prioritization or investment, or insufficient production speed.

• The Secretary shall further take steps to ensure that future contracts permit the Secretary to, upon determining that a contractor is experiencing such issues, cap executive base salaries at current levels (with inflation adjustments permitted) while scrutinizing executive incentives to ensure they are directly, fairly, and tightly tied to prioritizing the needs of the warfighter.

• The Order requires that executive incentive compensation under future contracts be tied to on-time delivery, increased production, and necessary operating improvements rather than short-term financial metrics.

• The Order directs the Secretary of War, in consultation with the Secretaries of State and Commerce, to consider halting advocacy efforts or denying new advocacy cases for underperforming contractors competing for international Foreign Military or Direct Commercial Sales.

• The Order also directs the Chairman of the Securities and Exchange Commission to reconsider safe-harbor protections for underperforming defense contractors.

ENSURING OUR CONTRACTORS DO THEIR BEST FOR THE GOVERNMENT: As Chief Executive and Commander in Chief, President Trump is holding underperforming defense contractors accountable to ensure the United States military maintains the most lethal warfighting capabilities in the world.

• After years of misplaced priorities, many defense contractors have been incentivized to prioritize investor returns over the Nation’s warfighters.

• These firms spend billions on stock buybacks and excessive dividends while falling behind on critical weapon systems and production timelines.

• Some firms have pursued newer, more lucrative contracts while failing to deliver on existing ones and sacrificed production capacity, innovation, and on-time delivery for stock buybacks and non-ordinary-course dividends to shareholders. These actions have left troops without the equipment they need.

• This behavior weakens military readiness, delays vital capabilities, and betrays the American people, who fund the defense budget.

• Although the United States produces the world’s best military equipment, it does not manufacture enough quickly enough to meet the needs of our military and our partners; therefore, in these dangerous times, it is imperative that defense contractors be held to the highest standards to ensure timely, high-quality delivery in support of core national interests.

• Every firm has a right to profit from prudent investment and hard work, but America’s defense industrial base has a responsibility to ensure America’s warfighters have the best possible equipment and weapons—these two objectives are not mutually exclusive.

PRIORITIZING U.S. NATIONAL SECURITY: President Trump has always put the warfighter first and demanded accountability from every part of the defense enterprise.

• President Trump has eliminated wasteful spending to focus every defense dollar on lethality and readiness.

• He signed an Executive Order to modernize defense acquisitions and spur innovation in the defense industrial base, ensuring red tape is no longer slowing defense acquisitions.

• He signed an Executive Order directing the Department of Defense to update medical standards to prioritize readiness and lethality.

• He signed an Executive Order to improve speed and accountability in the foreign defense sales system.

• He restored the historic name “Department of War” as a secondary title for the Department of Defense, signaling America’s resolve to maintain peace through overwhelming strength.

• He reinstated GI Bill education benefits to Veterans discharged under the Biden Administration for refusing the COVID vaccine.

[thegagline]

Adam Smith is rolling over in his grave.

[Red6]

Our war industry is full of single source suppliers in reality.

It’s hard to meet the bureaucratic requirements.

Politicians get involved and unless some of the bacon goes to their area, they won’t support it.

Keeping one hand on their throat to make sure they deliver, is prudent.

[SoConPubbie]

Adam Smith is rolling over in his grave.

This doesn't even qualify as a "Yeah, But" post.

And you are wrong. Since the government is paying these corps, they have the right to set the terms. And the terms that President Trump are demanding are Righteous!

[thegagline]

Good points. Thank you.

[ridesthemiles]

MULTIPLE WAYS TO SKIN A CAT.....

[Terry L Smith]

As a former NAVPRO/DPROQA gs-9 step 10 , it does my heart good to see these topics brought to light .
I wish those guys that will go to the many subcontractors , case in hand, and evoke the following,; “I’m from the government and I’m here to help.”

[XRdsRev]

They surrendered to big contractors on the “right to repair” issue. So we will still get weapon systems that only the OEM can repair, they take 6 months to a year to do it and they charge an arm and a leg for the privilege, whereas in many cases a U.S. government depot could do the work for a fraction of the cost and much faster.

[KC_Conspirator]

This is a good signing. It keep contractor delivery focused on quality delivery and not DEI, climate change, ESG, and whatever lefty nonsense.

[yelostar]

President Trump has eliminated wasteful spending

Not a chance.

Too bad DOGE never made it to the most wasteful federal agency, DoD.

Tens of trillions missing, over decades. Couldn’t pass an audit for decades.

In 2018 the government changed its accounting rules, allowing a lot of financial shenanigans. FASAB 56 it was, right at the very end of the Kavanaugh circus hearings. This made previously unallowable things related to government finances, A-OK.

DoD is probably the federal agency that benefits the most. They don’t have to work as hard to hide the fraud.

[XRdsRev]

While there certainly is some fraud in DOD, it is not as bad as some here think. Unless you understand how it is almost impossible for DOD to pass an audit (for a number of very legitimate reasons), people will think all sorts of money disappeared when it actually can be accounted for if one drilled down much further than a typical audit would go.

[yelostar]

I don’t think anyone can read this long, well-researched article - and not immediately recognize the problems at DoD/DoW.

The first word which comes to mind is…CRIMINAL. My thesaurus provides synonyms: illegal, unlawful, illicit, felonious, lawless.

DoD operates above the law, above the Constitution. The trick for decades is how they’ve been able to get away with it.

It’s hard to understand how our government can prosecute individuals and companies for financial crimes, and completely ignore our own house.

https://militarytruth.org/the-pentagons-bottomless-money-pit-including-a-personal-experience/

[Terry L Smith]

Hi. There is also that nasty cost plus contract. Mechanic drills of ground hole or too many holes, send to engineers to find fix, test fix stability of airframe, write fix, have mechanic yup same guy implement fix, have company and fed qa guys inspect, then charge customer.
ALL the F14s, A6s, EA6s, C2s, E2s, get this treatment!

[XRdsRev]

I’ve read the article and it is not as well researched as you think it is. I am not saying Taibbi is making stuff up but he glosses over a lot. The insistence that the Pentagon pass a corporate style audit, is ridiculous. There is no corporation on earth, that has the size, scope that the DOD must have. Nor is there any corporation that must maintain the physical and logistical footprint the DOD must maintain every hour of every day around the globe and in space.

Not saying the DOD is innocent but all these accusations of widespread fraud are ridiculous and unproven. They make for great political/ideological talking points but there have little bearing on the actual situation which is very complicated and always changing.

[BroJoeK]

yelostar: "I don’t think anyone can read this long, well-researched article - and not immediately recognize the problems at DoD/DoW.
The first word which comes to mind is…CRIMINAL. My thesaurus provides synonyms: illegal, unlawful, illicit, felonious, lawless."

I've seen no evidence of Pentagon criminal behavior or massive fraud of the type and scale that we're learning about in, for example, Minnesota's welfare programs.
Bureaucratic inefficiencies are one thing, and they are always intended to prevent certain kinds of problems from surfacing later.
That is certainly what the Pentagon has, and it's why things take so long and cost so much.
However, the current efforts to reduce bureaucracy and streamline procurements will absolutely produce the kinds of problems those inefficiencies are intended to prevent.

Is that acceptable?
Yes, under emergency or war-time conditions, we need quantity over quality.
Secretary of War Hegseth himself has publicly said that we are now willing to accept the 85% solution today, rather than waiting for 100% perfection at some indefinite time in the future.

If you want a good example of this: the B-29 bombers which helped win WWII went into service at least a year before they were fully ready, and one result was 10% of them crashed due to known mechanical flaws.
This would be 100% unacceptable in peacetime, but was 100% necessary during wartime.

Today, are we at peace or are we at war?
According to Sec. Hegseth, today is either 1939 or it's 1981.
He wants it to be 1981 with Reagan's victory in Cold War I in our sights, but he warns that if we don't take national defense seriously, this will be 1939 again, with massive future costs, destruction and deaths in our future.

In either case, Hegseth says we must ignore peacetime perfection and go for a more wartime realistic 85% solution to getting volume production into warfighters' hands.

WWII B-29 Bomber, 10% crashed (64% of combat losses) due to known mechanical problems:

[Red6]

Did you hear Hegseth yesterday at Star Base?

It starts at 1:17 : https://www.youtube.com/live/MlRm9tCT0Ug?si=NZyJmb3_3Ifktcp-

Not just because I said the same things, but ANYONE around the war machine that has been around a while can see what happened.

—You have a few giants that hog it all and have all the connections and political backing.

—The bureaucratic red tape is impossible for the small guy to navigate.

---

We have an R&D and tech base that is risk adverse. It does not see risk as needing managed, rather brought to zero. That’s only possible in a government bubble insulated from reality where costs and bringing a product to market timely are not concerns.

I assure you, no cell phone sold is without flaws and defects the manufacturer knows about, but costs and competing, brining this product to market on time make for a 90% solution on time, vs. the perfect solution to late.

Related: https://www.azquotes.com/picture-quotes/quote-a-good-plan-violently-executed-now-is-better-than-a-perfect-plan-executed-next-week-george-s-patton-22-65-80.jpg

[Red6]

True.

Look at our space program or early race with breaking the sound barrier and follow on speed records...

We were risking lives for progress. We knew that.

We should go crazy and throw stuff half-baked to the war fighter. No one is proposing that.

But what we have today is ridiculous. If you told our war industry to reheat an old potato, it would take them a month before they are done with their environmental impact study, ensure the microwave is energy star compliant, all work teams are diverse, and every state that brings home the bacon gets a part of the task (jobs and money).

[Red6]

Shouldn’t go crazy

[Red6]

Hegseth / Trump are streamlining the defense R&D and procurement system.

Imagine that, make is serve a customer, the war fighter.

For to long every other bullshit imaginable has become the priority and the actual customer gets mentioned in some speech but is an after thought. So bad is some of the political nonsense (an example I know about from the past) that we replaced superior Halon fire suppression systems on armored vehicles with less effective water mist systems because of the Ozone hole. But then we talk about serving the war fighter!

[yelostar]

Members of both parties have been frustrated with the DoD's financial unaccountability.

We are most certainly talking about financial malfeasance and criminal behavior, hence the Enron comparisons. But because it occurs within the government’s favorite black hole of an agency, accountability means nothing.

Enron (not from this article)..

At the end of 2001, it was revealed that Enron's reported financial condition was sustained by an institutionalized, systematic, and creatively planned accounting fraud, known since as the Enron scandal. Enron became synonymous with willful, institutional fraud and systemic corruption.

It’s clear from the article that these are not oversights or misunderstandings, that there is intent on the part of the agency to be deceptive and dishonest.

excerpts..

Despite being the taxpayers’ greatest investment — more than $700 billion a year — the Department of Defense has remained an organizational black box throughout its history. It’s repelled generations of official inquiries, the latest being an audit three decades in the making, mainly by scrambling its accounting into such a mess that it may never be untangled.

Ahead of misappropriation, fraud, theft, overruns, contracting corruption and other abuses that are almost certainly still going on, the Pentagon’s first problem is its books. It’s the world’s largest producer of wrong numbers, an ingenious bureaucratic defense system that hides all the other rats’ nests underneath.

If and when the defense review is ever completed, we’re likely to find a pile of Enrons, with the military’s losses and liabilities hidden in Enron-like special-purpose vehicles, assets systematically overvalued, monies Congress approved for X feloniously diverted to Program Y, contractors paid twice, parts bought twice, repairs done unnecessarily and at great expense, and so on.

Enron at its core was an accounting maze that systematically hid losses and overstated gains in order to keep investor money flowing in. The Pentagon is an exponentially larger financial bureaucracy whose mark is the taxpayer. Of course, less overtly a criminal scheme, the military still churns out Enron-size losses regularly, and this is only possible because its accounting is a long-tolerated fraud.

Three decades into the effort to pry open the Pentagon’s books, it’s not clear if we’ve been going somewhere, or we’ve just been spending billions to get nowhere, in one of the most expensive jokes any nation has played on itself. “When everything’s always a mystery,” says Grassley, “nothing ever has to be solved.”

The Pentagon every year employs an accounting shortcut that should make more sense to civilians at this time of year, because it’s similar to what the roughly six percent of Americans who cheat on taxes do annually.

The system makes sense, except for one problem: The financial reports the Pentagon submits are faked

It’s illegal for any government agency to spend money appropriated for one purpose on a different program. But the military — either hilariously or horribly, depending on your perspective — created a program that algorithmically produced such violations of the law. They weren’t minor violations: Grassley has fought for years against such automatic payments, saying bureaucrats use them to “avoid violations of the Antideficiency Act — a felony.” Last year’s audit found the Antideficiency Act was one of five laws the agency violated.

As a result, those year-end financial statements will look like they match congressional intentions. In truth, the statements packed with thousands of plugs are fictions, a form of systematic accounting fraud Congress has quietly tolerated for decades.

Compound that with decades of cuts to the Pentagon’s staff of criminal investigators and you have an open invitation to crime. Invoices could be systematically inflated for decades and no one would know. As Andy the Air Force accountant puts it, the system is “desensitized to fraud.”

Congress really has only two ways to respond when the DoD breaks the law.

There are articles I could post from other media outlets which vary on content, but they all outline the exact same behavior.

Structural stability and financial accountability could have been built into the data systems employed by this agency decades ago.

They chose not to.

You can’t hide things when 1 + 1 = 2.

As for the argument that the DoD is too big and too complex to, essentially - be accountable, it's hard to make that case in today's world of AI, algorithms, and computer systems that have been perfected to handle massive amounts of data, as well as intricate and complex organization.

If there's any time in history that the DoD/DoW should be engineering an accountable system, it's now. But they really could have done it a long time ago.

If the will was there, the rest would follow.