This bill creates a pilot program allowing the Department of Defense to use an alternative method called "capability-based analysis" when evaluating prices from nontraditional defense contractors, such as commercial companies new to defense work. Instead of using traditional pricing methods, contracting officers can assess whether a proposed price is fair by considering factors like the product's usefulness, the contractor's technical expertise, their business model and financial projections, potential cost savings compared to existing solutions, and feedback from the military personnel who would actually use the product. The Defense Department must report to Congress by February 1, 2028, on how well this approach worked in increasing participation from nontraditional contractors and in giving the military access to new technologies. The pilot program will automatically end on September 30, 2029, unless Congress takes action to extend it. This legislation aims to make it easier for innovative companies outside the traditional defense industry to do business with the military while ensuring the government still gets good value for its money.
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