Win-Wins: Multiyear Procurement in the NDAA

In keeping with tradition of 65 consecutive years, Congress passed the National Defense Authorization Act (NDAA) for fiscal year 2026 this week. Though Congress missing the unofficial October 1^st deadline and holding on the Defense Appropriations bill which actually provides funding for fiscal year 2026 does not inspire confidence, the NDAA’s unfailing passage each year demonstrates that providing for the common defense remains a priority for the legislative branch.

Despite simmer tensions across the globe, the United States government has been a less-than-ideal partner to our friends in the defense industrial base, making it difficult for them to fill our supply chests. The consequences of Congress’s inability to fund the government on schedule and an overreliance on continuing resolutions as funding stop gaps has been detrimental to our ability to arm ourselves. Without a reliable source of funding and a clear and stable demand signal, it’s not surprising our defense industrial base is both an unwilling partner and unable to produce to fill our needs. Though continuing resolutions ensure funding remains available, they freeze funding at levels from the year prior. This does not account for inflation and leaves a gap in funding that once again results industry looking warily at the government’s ability to be a good partner.

The multiyear procurement model avoids both of these challenges by allowing the government to use a single contract spanning for two to five years’ worth of procurement without having to exercise a contract option each year. This mitigates the financial risks for defense companies, making them more likely to be able to produce what we need. Multiyear procurement contracts have also been used for other large-scale procurements like ships and planes.  Now, the FY26 NDAA includes multiyear procurement for the standard missile-3 (SM-3), Terminal High Altitude Area Defense (THAAD), Tomahawk Cruise Missile, the Long-Range Anti-Ship Missile (LSRASM), Patriot Advanced Capability (PAC-3), and other critical munitions.

Multiyear procurement is mutually beneficial to defense companies and the Department of War. Defense companies become less risk averse meaning they are better able to respond to the demand from the Department of War. As our defense industrial base adequately responds, the Department of War is better ability to navigate planning efforts. As we restock our munitions shelves thanks to this new provision, we become better able to a deter a potential conflict.

With the Administration’s renewed focus on Acquisition reform and Congress’s steps in this year’s NDAA to codify these reforms, we are taking serious steps in the right direction. Our challenge must now be to focus on implementation and ensuring industry is able to meet the demand. As we send a clear demand signal to industry, we are also signaling to our adversaries that we are able to face their challenge.

Anne Lord is the Director of Government Affairs and Defense Policy for the Vandenberg Coalition. A former staffer for Senator Ben Sasse, she holds a master’s in strategic studies from the University of St. Andrews.