Prioritizing the Warfighter in Defense Contracting Act of 2026
Sponsored By: Senator Warren, Elizabeth [D-MA]
Introduced
Summary
**This bill would force Department of Defense contractors to put *warfighter needs ahead of stock buybacks and short-term pay incentives*.** It would bar large contractors from buying exchange-listed equity, ban pay tied to short-term financial metrics, and cap covered compensation.
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- Large contractors would be covered only if they had more than $250 million in annual DoD revenue in any of the prior three years. Those contractors would have to agree not to buy their own equity listed on national exchanges and to limit covered compensation to $5,000,000 per calendar year.
- Covered employees includes executives and officers whose pay can be tied to bonuses, equity awards, or short-term metrics. Contractors must certify before award and annually that they are not engaging in the banned practices.
- The Secretary of Defense would get a waiver authority for contractors that meet strict performance metrics, including at least 80 percent thresholds on delivery and technical measures in the prior fiscal year.
- Enforcement would include compliance plans, tracking violations in federal contractor databases, remedies like clawbacks, suspension or debarment, and public annual and quarterly reports to Congress.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 1 costs, 1 mixed.
Pay and buyback limits for large contractors
This bill would set who counts as a "large contractor" and limit their finances. A "large contractor" would be any firm with more than $250 million in annual DoD revenue in any of the last three years. The Department of Defense would not sign a contract with a large contractor unless the company agrees not to buy its own stock or pay dividends on exchange-listed equity. Covered executives and officers would have a $5,000,000 yearly cap on covered compensation and could not tie pay to short-term financial metrics like free cash flow, operating cash flow, or buyback-driven earnings per share.
Tighter oversight and penalties for contractors
This bill would create new compliance steps, reviews, and penalties for large DoD contractors. Covered contractors would need a written compliance plan and must certify before each contract award and yearly that they and covered employees are not doing banned activities. The Defense Secretary must set up a review system within 30 days, may grant time-limited waivers to contractors that meet strict performance metrics, and must recheck waivers annually. If violations are found, the Department would notify the contractor, track the case publicly, and could suspend payments, claw back pay, stop progress payments, cancel contracts, refer for suspension or prosecution, or stop backing foreign sales. The Secretary would also send Congress an annual public report (first due within one year) and a public quarterly waiver report starting within 90 days.
Sponsors & CoSponsors
Sponsor
Warren, Elizabeth [D-MA]
MA • D
Cosponsors
Sen. Hawley, Josh [R-MO]
MO • R
Sponsored 3/25/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov