Pentagon should shave defense procurement regulation: industry group

Reuters

2 days ago

WASHINGTON, June 9 (Reuters) - As the Pentagon overhauls procurement regulations, an industry group that represents defense and aerospace companies says it identified over 50 regulatory requirements that discourage companies from doing business with the government.
The Pentagon has embarked on a renewed attempt to change how the Pentagon acquires weapons and support systems. One example was a March memo signed by Secretary of Defense Pete Hegseth changing how the Pentagon buys software.
In a June 3 letter to Hegseth, the Aerospace Industries Association (AIA), which represents a wide swath of defense companies including Lockheed Martin Corp (LMT.N), opens new tab, Boeing Co (BA.N), opens new tab General Dynamics Corp (GD.N), opens new tab and others, said its members want to eliminate burdensome regulations that have frustrated them for years.
"The cumulative growth of these requirements over time has created a regulatory framework that itself poses an endemic risk: stifling innovation, diminishing the supplier base, driving up costs, and delaying delivery," said Eric Fanning, the head of the AIA said in the letter.
Key areas AIA targeted for reform include cybersecurity compliance, cost accounting standards, intellectual property rules, and commercial acquisition requirements. Industry leaders have argued these regulations create unnecessary obstacles to an expedited acquisition process.
Particularly problematic were the Cybersecurity Maturation Model Certification requirements, which industry representatives say place substantial risk and liability on prime contractors who must verify compliance throughout their entire supply chain.
Other targeted regulations include Cost Accounting Standards that force companies to maintain separate accounting systems from standard commercial practices, and intellectual property rules that industry claims discourage companies from offering their best technologies to the Pentagon.