Trump Puts Warfighter First in Defense Contracts

PUTTING OUR WARFIGHTERS FIRST: Today, President Donald J. Trump signed an Executive Order to stop defense contractors from putting stock buybacks and excessive corporate distributions ahead of production capacity, innovation, and on-time delivery for America's military.

• The Order directs the Secretary of War to identify defense contractors that underperform, fail to invest their own capital in production capacity, insufficiently prioritize U.S. government contracts, or maintain inadequate production speed while spending money that could be spent on those critical needs on stock buybacks or corporate distributions.
• Identified contractors have the opportunity to submit a remediation plan or otherwise engage with the Secretary of War to resolve the issues; if the Secretary of War determines the plan is inadequate or the dispute remains unresolved after mutual discussions, the Secretary is authorized to immediately pursue remedies including mutually agreeing to amend the underlying contract, exercising authorities under the Defense Production Act, or pursuing other available contract enforcement mechanisms.
• The Order directs the Secretary of War to take steps to ensure that future contracts prohibit stock buybacks and corporate distributions during periods of underperformance, non-compliance, insufficient prioritization or investment, or insufficient production speed.
• The Secretary shall further take steps to ensure that future contracts permit the Secretary to, upon determining that a contractor is experiencing such issues, cap executive base salaries at current levels (with inflation adjustments permitted) while scrutinizing executive incentives to ensure they are directly, fairly, and tightly tied to prioritizing the needs of the warfighter.
• The Order requires that executive incentive compensation under future contracts be tied to on-time delivery, increased production, and necessary operating improvements rather than short-term financial metrics.

• The Order directs the Secretary of War, in consultation with the Secretaries of State and Commerce, to consider halting advocacy efforts or denying new advocacy cases for underperforming contractors competing for international Foreign Military or Direct Commercial Sales.
• The Order also directs the Chairman of the Securities and Exchange Commission to reconsider safe-harbor protections for underperforming defense contractors.

ENSURING OUR CONTRACTORS DO THEIR BEST FOR THE GOVERNMENT: As Chief Executive and Commander in Chief, President Trump is holding underperforming defense contractors accountable to ensure the United States military maintains the most lethal warfighting capabilities in the world.

• After years of misplaced priorities, many defense contractors have been incentivized to prioritize investor returns over the Nation's warfighters.
• These firms spend billions on stock buybacks and excessive dividends while falling behind on critical weapon systems and production timelines.
• Some firms have pursued newer, more lucrative contracts while failing to deliver on existing ones and sacrificed production capacity, innovation, and on-time delivery for stock buybacks and non-ordinary-course dividends to shareholders. These actions have left troops without the equipment they need.
• This behavior weakens military readiness, delays vital capabilities, and betrays the American people, who fund the defense budget.
• Although the United States produces the world's best military equipment, it does not manufacture enough quickly enough to meet the needs of our military and our partners; therefore, in these dangerous times, it is imperative that defense contractors be held to the highest standards to ensure timely, high-quality delivery in support of core national interests.
• Every firm has a right to profit from prudent investment and hard work, but America's defense industrial base has a responsibility to ensure America's warfighters have the best possible equipment and weapons-these two objectives are not mutually exclusive.

PRIORITIZING U.S. NATIONAL SECURITY: President Trump has always put the warfighter first and demanded accountability from every part of the defense enterprise.

• President Trump has eliminated wasteful spending to focus every defense dollar on lethality and readiness.
• He signed an Executive Order to modernize defense acquisitions and spur innovation in the defense industrial base, ensuring red tape is no longer slowing defense acquisitions.
• He signed an Executive Order directing the Department of Defense to update medical standards to prioritize readiness and lethality.
• He signed an Executive Order to improve speed and accountability in the foreign defense sales system.
• He restored the historic name "Department of War" as a secondary title for the Department of Defense, signaling America's resolve to maintain peace through overwhelming strength.
• He reinstated GI Bill education benefits to Veterans discharged under the Biden Administration for refusing the COVID vaccine.