Defense Industry Prepares for Congressional Scrutiny Ahead of 2027

Newer defense companies should prepare for potential Congressional anti-corruption probes and review their ties to the Trump administration before the incoming Democrat-led Congress goes into session next year, said Kristina Moore, a partner with Womble Bond Dickinson law firm in Washington, D.C.

Companies should assess their boards and consider “preparedness,” which means understanding what oversight is and is not, Moore, who was previously a Congressional investigator and has advised clients undergoing such probes, told Defense One. “There is a lot of uniqueness to this space.”

Moore said how Congress handles privileged communications can be a common surprise.

“Congress’s position is that common law privileges, attorney-client privilege, and work product privilege are recognized at its discretion. And so that is going to be surprising, where a lot of general counsels might be under the operating assumption that ‘that’s a privileged conversation because I was in the room, outside counsel was in the room. That’s privileged, right?’ That might not be the case,” Moore said, adding that it is important for companies to understand how Congress works, what they are looking for, and the tools they use.

“If you get a letter from Congress, generally there is a two-week timeline—and that is actually if Congress is being generous. That is a very short clock to respond to before pressure goes up in terms of threatening the compulsory process or actually implementing the compulsory process.”

Moore said the hot topics ripe for Congressional investigation are Iran, Venezuela—including boat strikes to curb alleged drug imports to the U.S.—and AI policy and use.

“That is in the zone of great interest. And then the question is: Are you in that zone? Do you have any interesting information? Were there any talks with the president?” she said. “Definitely now is a time to take and assess what your risk is and how do you organize the business around that risk in order to navigate what may come.”

Zooming in on foreign military sales. The Trump administration has pushed for more foreign military sales and ushered in reforms last year. That could lead to more scrutiny in 2027 with Democrats leading Congress, said Shaun McDougall, lead defense analyst for Forecast International, a sister brand of Defense One.

• “The administration has been very open with trying to push or get sales as high as possible. And so you have maybe more controversial deals with places like Saudi Arabia or Turkey, where Democrats might try to put up some roadblocks,” he said.
• “Those are things that could also impact U.S. companies…from high-end stuff like the F-35, to munitions, to smaller components.”

Could demand for some military equipment stay relatively level? It’s possible, McDougall said: “Things like the Iran war, aid to Ukraine—there’s some overlapping requirements with both of those that could impact acquisition and contractors.”

• “Demand for missile defense, [counterdrone] capabilities, low-cost interceptors, low-cost munitions. There’s demand for that type of stuff…but depending on how those conflicts proceed and how the U.S. approaches it could impact near-term demand.”

One company’s ‘blue wave’ outlook: Bipartisan work on the Hill should prevail.

• “The push to modernize and equip the military has support on both sides of the aisle. The next Congress can continue making headway to find new defense technology,” Ben Kesling, Chariot Defense’s government relations head, told Defense One via email.
• “A unit operating at the edge still needs weaponry, comms, sensors, [command and control], and power, whoever chairs the committee in January. The next Congress will have hard debates over budgets and policy, but getting affordable, durable capabilities into the hands of American troops has already drawn support from both parties…That work should carry forward.”

In Hawaii last week, the Defense Information Systems Agency completed its Olympus Fires exercise alongside foreign partners and military components in the Pacific, with the goal of everyone using the same digital environment to share the data needed to find and precisely shoot a target.

• “To bring those teams together in a common environment with common data to deliver those capabilities—that was the demonstration we were able to deliver. No swivel chair,” said Col. Michael Hlad, commander of DISA’s Pacific regional field command.
• For example, a Marine Corps Air Naval Gunfire Liaison Company, or ANGLICO, team was able to locate and pinpoint a target that could then be “executed by a Canadian shooter,” Hlad told Defense One following his TechNet Indo-Pacific session.
• Being able to take data, share it to locate and track and fire on a target “all in the same environment, is something we haven’t been able to demonstrate before,” he said.
• A full analysis is pending, but one early takeaway was “a clear understanding of what’s capable from a coalition environment” and a plan to expand the series to evaluate other areas, including logistics and maneuver, Hlad said.
• GDIT’s Vion Edge was also tested during the exercise to demonstrate “a tactical kit that provides all of your core [mission partner environment] services…when a network may go down temporarily,” Jason Myers, vice president of defense agencies for GDIT, told Defense One. For example: “We had one military service [where] their network had gone down. They moved all their logs onto our platform and used our AI capability to diagnose and identify what needed to be fixed…to be able to get it back up within a matter of hours.”

Making moves + other news

• Rear Adm. Jonathan Rucker will be the Navy’s program acquisition executive for maritime.
• Shield AI unveiled its X-BAT prototype and plans to buy radar-maker Echodyne for $5.3 billion.
• Oshkosh Defense, known for making military trucks, is teaming up with Grid Aero to build aerial drones.

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