To limit stock buybacks, shareholder dividends, and executive compensation for certain underperforming contractors as determined by the Secretary of Defense, and for other purposes.
About This Bill
Committee
Latest Action · June 9, 2026
Referred to the House Committee on Armed Services.
This bill would allow the Secretary of Defense to restrict certain financial activities by major defense contractors who underperform on their contracts. Specifically, for defense contracts valued at $100 million or more, the Pentagon could prohibit contractors from conducting stock buybacks, issuing shareholder dividends, or paying executives (including CEOs) more than $5 million annually if the contractor fails to deliver on time and on budget, or if they fail to maintain adequate production speed and capacity. The restrictions would apply only to contracts signed after the bill becomes law and would be triggered by contractor actions such as inadequate investment in production methods or failure to maintain necessary equipment. The bill targets the financial practices of major defense contractors to incentivize better performance and redirect resources toward meeting military needs. No specific funding or implementation timeline is specified in the legislation.
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